Gov. Bill Haslam's gas tax proposal can now formally head to his desk after House lawmakers on Monday officially gave their final seal of approval to his signature piece of legislation for the year.

After discussing the merits of including property tax relief for eligible veterans and the elderly in the legislation, the lower chamber ultimately agreed to conform with the Senate version of the measure, providing Haslam his biggest legislative win of the year.

"I want to thank all the members for their diligence on this topic. I realize it was a hard one but I honestly think this is really good news for the state going forward," the term-limited Knoxville Republican governor said immediately after the House vote.

Haslam said he knew the effort to get the legislature to approve the proposal would be difficult, especially in light of the state's budget situation.

"The good news of the surplus also meant that we were able to cut more taxes than what are going up," he said. "For that reason, all Tennesseans win."

Here are some additional details about the governor's gas tax proposal and what it means for you.

What is the IMPROVE Act?

The IMPROVE Act is an acronym for “Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy Act,” a proposal that Haslam introduced in January in an effort to help fund the state’s $10 billion backlog in road projects.

The legislation is estimated to provide $250 million to the state Department of Transportation, $70 million to counties and $35 million to cities, all of which would be used specifically to address transportation needs.

Why should I care?

The legislation would impact everyone in Tennessee — at least those who buy food at grocery stores or purchase gasoline or diesel fuel — in addition to some businesses and individuals who pay taxes on interest and dividend income.

While the tax on gas would increase, shoppers would see the price of their grocery bills decline slightly, leading backers of the legislation to say the tax cuts featured in the IMPROVE Act far outweigh the tax increases.

MORE: What the passage of Haslam's gas tax plan means for future politics in Tennessee

In addition to the various costs associated with the IMPROVE Act, the legislation helps fund 962 projects spread throughout the state’s 95 counties.

Haslam and others have argued every area in the state will see their projects funded through the bill, and the measure will prevent local governments from using alternative means, such as increasing property taxes, to pay for needed improvements.

Why were some people opposed to it?

Criticism of the legislation varies. Some, including Democrats, argue there aren’t enough tax cuts for everyday Tennesseans. They say the tax cuts for businesses far outweigh the benefits low- and middle-class residents will see.

Other more conservative opponents, including the state chapter of Americans for Prosperity, say the state should be using the state's budget surplus to pay for transportation needs.

Yet another group of opponents argue lawmakers can pay for transportation by simply taking a portion of the state’s general fund revenue and shifting it to road projects instead of raising taxes.

Haslam has dismissed the criticisms for a variety of reasons, suggesting that his plan is a responsible, conservative approach that gives tax cuts to everyone while also providing a long-term solution to a problem that has plagued the state for years.

How much will my gas prices go up and when?

Currently, the state's tax on gasoline is 21.4 cents per gallon. Overall, the plan increases the tax by 6 cents per gallon over the next three years.

Those purchasing gasoline would begin paying an additional 4 cents per gallon on gasoline starting July 1, with additional 1 cent increases in 2018 and 2019.

Diesel taxes are currently 18.4 cents per gallon. Anyone who buys diesel fuel would pay an additional 4 cents per gallon beginning July 1, with 3-cent increases in both 2018 and 2019.

How much will my food prices go down and when?

Under the IMPROVE Act, the state's tax on food and ingredients will decrease from 5 percent to 4 percent starting on July 1. That means a family that spends $100 on groceries will pay $1 less in taxes. The overall cut to the state's tax on groceries is estimated to provide an estimated $125 million in savings to Tennesseans.

What other fees and cost increases are there?

The owners of most vehicles in Tennessee would pay an additional $5 per vehicle for registration fees. Those who drive private and commercial motor vehicles — including buses, limos and taxis — that are used to transport passengers would pay an additional $10 each vehicle.  Ride sharing operators are exempt. Operators of heavy trucks like semis would pay $20 more for registration.

Owners of the approximately 2,500 electric vehicles in Tennessee will pay an additional $100 registration and renewal fee, since they don't pay fuel taxes; hybrid-electric cars do not have to pay the fee.

The tax on liquefied natural gas and compressed natural gas goes up 3 cents per gallon on July 1, with additional increases of 2 and 3 cents, respectively, over the next two years.

What other tax cuts are in the IMPROVE Act?

A portion of the IMPROVE Act specifically related to businesses makes changes to the state's franchise and excise tax in an effort to get businesses to expand in Tennessee, as well as bring out-of-state companies into the Volunteer State.

The change to the state's franchise and excise tax on manufacturers is estimated to provide a savings of about $113 million to 518 companies that currently pay it.

Beyond the business tax cuts, the IMPROVE Act also includes a plan to fully eliminate the Hall Income Tax — the tax imposed on dividends and interest in Tennessee. Although lawmakers approved legislation in 2016 to phase out the Hall tax, the IMPROVE Act reduces the tax from 5 percent to 4 percent this year, with one percent decreases occurring each year until the tax is completely eliminated.

Eligible low-income elderly and disabled homeowners, as well as 100 percent disabled service-connected veterans will be able to receive additional property tax relief under the IMPROVE Act.

Today, eligible veterans can receive tax relief based only on the value of the first $100,000 of their home. The latest proposal would increase the amount to $175,000, a move that completely reinstates changes to the property tax relief program that were made several years ago due to concerns from the governor's office.

The value limit for low-income elderly and disabled Tennesseans would also increase from $23,500 to $27,000.

In addition, the property tax relief program would be indexed for inflation, further providing stability to beneficiaries.

What about mass transit and the local option?

Twelve of the state's most populous counties will be allowed to hold a referendum to ask their residents if they would approve additional tax increases to help pay for transportation projects, including mass transit. If voters approved the referendum, the taxes that local governments could raise are: sales tax, business tax, car rental tax, hotel/motel tax, residential development tax and wheel tax.

Additional surcharges enacted would be capped at 20 percent of the current rate.

Any proposed projects funded by the additional surcharges would be subject to an audit by the state's comptroller, who would need to sign off on the plan in advance.

Reach Joel Ebert at or 615-772-1681 and on Twitter @joelebert29.